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Dow Jones Industrial Average News, 5/4/2016: Reality is setting in right now. Tuesday's decline extended into Wednesday (today) after a flurry of news spooked investors.
Continued weakness in China's manufacturing sector, a surprise cut in interest rates by the Reserve Bank of Australia, and a downgrade in European growth expectations rattled investor sentiment.
The United States saw weakened private-sector job growth in 2016 in April. The nation added just 156,000 jobs in April, well short of economist expectations. The weaker-than-expected figure puts Friday's unemployment report in focus and raises the stakes for the Federal Reserve.
Here's today's top stock market news, stocks to watch, ways to profit and economic calendar for May 4, 2016.
What's Moving the Dow Jones Industrial Average Today: Weak Economic Data
Dow Jones futures projected a 76-point decline as investors digested weak employment numbers and raised new concerns about global economic growth.
The Most Important IPOs to Watch in 2016: There was almost no IPO activity last year. But we'd expect Wall Street to get excited if these five companies went public in 2016.
Here's a breakdown of why the Dow is pushing lower this morning.
- First up, it looks like the Republican nomination was wrapped up on Tuesday night after Donald Trump won the Indiana primary by a landslide and second-place finisher Sen. Ted Cruz (R-TX) suspended his campaign. Though John Kasich will remain in the race, Trump maintains an overwhelming lead in the delegate count. Meanwhile, Sen. Bernie Sanders (D-VT) sent a message to Democratic leadership after defeating front-runner Hillary Clinton. At this point last year, no one would have suspected that the Republican nomination would effectively be wrapped up before the presumptive nomination of Hillary Clinton.
- Another day, another settlement from Wall Street banks for doing something that they shouldn't have done. Seven banks have paid more than $300 million in settlements after they rigged the international interest benchmark used in the $553 trillion derivatives market. The seven banks are Bank of America Corp (NYSE: BAC), Barclays Plc. (NYSE ADR: BCS), Citigroup Inc. (NYSE: C), Credit Suisse Group AG (NYSE ADR: CS), Deutsche Bank AG (NYSE: DB), JPMorgan Chase & Co. (NYSE: JPM), and Royal Bank of Scotland Group Plc. (NYSE: RBS).
- Deal speculation is back in focus this morning. Pfizer Inc. (NYSE: PFE) has reportedly approached Medivation Inc. (Nasdaq: MDVN) about a possible deal. MDVN, a manufacturer of cancer drugs, has already turned down an offer from Sanofi SA (NYSE ADR: SNY) worth $9.3 billion. MDVN stock was up 4.5% in pre-market hours.
- WTI crude oil prices are in focus today as the U.S. Energy Information Administration is set to release its weekly update on crude inventories. WTI crude prices were up 0.8%, while Brent crude added 0.9% this morning. Crude prices rose slightly after a massive wildfire threatened lands close to Canadian oil-sands production in Alberta. Shares of Suncor Energy Inc. (NYSE: SU), which maintains significant production in the region, saw shares decline by more than 3% early this morning.
Now here's your list of top stocks to watch in today's market, plus today's economic calendar:
Companies to Watch in the Stock Market Today
- Shares of Apple Inc. (Nasdaq: AAPL) slipped slightly this morning a day after chatter emerged about possible strategies to overcome its struggles in China. Last week, the company reported its worst quarterly earnings report since 2003 and took a public relations hit when activist shareholder Carl Icahn announced that his firm had ditched its sizable stake in the technology giant. That said, investors shouldn't overthink Apple stock and make the same mistake that Icahn has made. Apple will turn it around, and here's how.
- One of Apple's largest suppliers – Dialog Semiconductor Plc. (FRA: DLG) – cratered more than 10.5% on foreign exchanges after the firm reported a massive decline in operating profits. The firm said that it saw a 58% decline in profits. That raises concerns about other AAPL suppliers as semiconductor firms continue to report earnings in the wake of Apple's dismal earnings report last week.
- U.S. retailer Aeropostale Inc. (OTCMKTS: AROP) announced that it's filed for Chapter 11 bankruptcy protection. The firm is in the process to gain debtor-in-possession financing from private equity firms and said it will close 154 North American stores.
- Alphabet Inc. (Nasdaq: GOOGL) and Fiat Chrysler Automobiles NV (NYSE: FCAU) announced they are partnering to build an autonomous minivan. The initial fleet will have 100 vehicles.
- On the earnings front, shares of Time Warner Inc. (NYSE: TWX) were up 1.5% this morning after the company topped Wall Street earnings expectations by $0.19. The firm reported strong earnings from HBO and Turner divisions. HBO, which produces the popular show "Game of Thrones," saw a 7.7% increase in quarterly growth.
- On the earnings front, look for additional reports from Priceline Group Inc. (Nasdaq: PCLN), Tesla Motors Inc. (Nasdaq: TSLA), Whole Foods Market Inc. (Nasdaq: WFM), Zynga Inc. (Nasdaq: ZNGA), Fitbit Inc. (NYSE: FIT), and Transocean Ltd. (NYSE: RIG).
Today's U.S. Economic Calendar (all times EDT)
- MBA Mortgage Applications 7 a.m.
- ADP Employment Report at 8:15 a.m.
- 10-Year Note Announcement at 8:30 a.m.
- 30-Year Bond Announcement at 8:30 a.m.
- International Trade at 8:30 a.m.
- Productivity and Costs at 8:30 a.m.
- Gallup U.S. Job Creation Index at 8:30 a.m.
- Treasury Refunding Announcement at 8:30 a.m.
- 3-Year Note Announcement at 8:30 a.m.
- PMI Services Index at 9:45 a.m.
- Factory Orders at 10 a.m.
- ISM Non-Manufacturing Index at 10 a.m.
- EIA Petroleum Status Report at 10:30 a.m.
- Minneapolis Federal Reserve Bank President Neel Kashkari speaks at 5:30 p.m.
Update On The Panama Papers: On May 9, expect some truly shocking revelations from the International Consortium of Investigative Journalists. This time, the reporters won't hold back. Here's everything you need to know…
About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, and consultant with degrees from Northwestern, Johns Hopkins, Purdue, and Indiana University. He is a seasoned financial and political risk analyst, with a focus on stocks, hedge funds, private equity, blockchain, and housing policy. He has conducted risk assessment projects for clients in 27 countries, and consulted on policy and financial operations for some of the nation's largest financial institutions, including a $1.5 trillion credit fund, a $43 billion credit and auto loan giant, as well as two of the largest Wall Street banks by assets under management.
Garrett joined Money Map Press as an economist and researcher in 2011, specializing in alternative strategies with an emphasis on fundamental and technical analysis.